US housing investors to benefit from rising rates

Added 21st December 2015

While it is not without its risks, a rising interest rate environment is likely to benefit the UD mortgage backed securities market in 2016, says BNP Paribas manager Matt Slootsky.

According to Slootsky, although the US housing market has been very positive in the past few years, there remains a dearth of housing stock.

And, he adds: “As rates and mortgages go higher, borrowers’ ability to refinance is effectively going to go to zero, so the value of those mortgages is going to go up considerably and the yield you are going to realise from those securities will rise as well. 

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Geoff Candy

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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.

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